Mike Seery’s Daily Commodity Comments For 5-17-21

Mike Seery’s Daily Commodity Comments For 5-17-21
Mike Seery’s Daily Commodity Comments For 5-17-21

Cotton Futures—Cotton futures in the July contract is currently trading higher by 64 points at 83.07 reversing some of the sharp losses that we witnessed over the last couple of days as prices are right near a 4 week low. I had been recommending a bullish position over the last month or so from around the 79.00 level getting stopped out last week around the 85.50 area as it is time to become neutral and wait for another trend to develop.

At the time of the recommendation it was a counter-trend trade as prices dropped rather precipitously over the last several days following the grain market lower as some of the agricultural sectors may have gotten ahead of themselves.

I will be looking at another bullish position in the coming weeks as I still do not believe we have seen the highs in 2021 despite the fact that we are now trading below the 20 day but still above their 100-day moving average telling you that the trend is mixed. Keep a close eye on this market as we could be involved soon especially if we head down to major support levels around the 80 area as I will be looking at a possible bullish recommendation once again as the downside is limited in my opinion. 

TREND: MIXED

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 

Natural Gas Futures—   Natural gas futures in the June contract is sharply higher this Monday afternoon in New York up 15 points or 5.03% at 3.11 as prices have now hit a 15-month high. Fundamentally speaking outlook for increased nat-gas demand to power air-conditioning after Maxar forecast well above-normal temperatures for the Upper Midwest from May 19-23 and above-normal temperatures for the U.S. East and West from May 24-28th.

I have been recommending a bullish position from the 2.66 level and if you took that trade continue to place the stop-loss under the 10-day low standing at 2.88 as the proper exit strategy, however the chart structure will not improve for another 6 trading sessions so you will have to accept the monetary risk at this time.

If you have been following my previous blogs you understand that all of my trade recommendations are to the upside as I truly believe 2021 will continue to experience excellent trends as quantitative easing should continue to support natural gas at this time so stay long with the next major level of resistance standing all the way up at the 3.50 level as I think that will be touched in the coming weeks ahead. 

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 

 

Ripe oranges on the tree

Orange Juice Futures—Orange juice futures in the July contract is trading higher for the 3rd consecutive session up another 50 points at 116.80 as prices have now hit a 2 month high.

I have been recommending a bullish position for quite some time in this commodity from around the 110 level and if you took that trade continue to place the stop loss at 99.00 as an exit strategy, however I will not raise that stop loss so you will have to accept the monetary risk at this time. Juice prices are now trading above their 20 and 100 day moving average telling you that the trend has now turned to the upside as this was a counter trend recommendation as I still think the downside is very limited.

At the current time I have bullish recommendations in sugar, coffee, and cocoa as I was stopped out of cotton last week as I still believe the commodity markets head higher throughout 2021. I will be looking at adding more contracts to the upside once the risk/reward becomes more in your favor which could possibly happen in next week’s trade so stay long. 

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY: AVERAGE

 

 

 

Silver Futures—Silver futures in the July contract is trading sharply higher for the 2nd consecutive session up another $0.78 or 2.85% at 28.15 an ounce as prices have now hit a 3 month high. I have been recommending a bullish position from the 25.85 level and if you took that trade continue to place the stop loss on a closing basis only under the 10-day low which now stands at 26.16 as the proper exit strategy, however the chart structure will improve later this week therefore the monetary risk will be reduced.

In my opinion I believe prices are going to break the February 1st high of 30.01 in the coming weeks ahead as I see absolutely no reason to be short silver or any commodity at the given time. Silver prices are trading far above their 20 & 100 day moving average as this trend is getting stronger on a weekly basis to the upside as I will be looking at adding more contracts once the risk / reward becomes more in your favor later this week as adding to winners and exiting losers is the way to trade over the course of time.

The volatility certainly will start to expand especially the higher the price climbs so make sure that you only risk 2% of your account balance on any given trade. 

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 

 

Cocoa Beans and Cocoa Powder with Chocolate Bars on Wood Table.

Cocoa Futures—Cocoa futures in the July contract is breaking out to the upside this Monday afternoon in New York up 75 points or 3.03% at 2549 as prices have now hit a 2 month high. I have been recommending a bullish position from around the 2500 level and if you took that trade continue to place the stop loss under the 10-day low which now stands at 2316 as the proper exit strategy, however that chart structure will improve in Wednesday’s trade therefor the monetary risk will be reduced.

Cocoa is now trading above its 20 and 100 day moving average for the 1st time in months telling you that the trend is to the upside with the next major level of resistance standing all the way up at 2650 which I think could be touched in the coming weeks ahead. The volatility at the current time remains high as we have rallied over 200 points over the last week or so as you have to remember historically speaking cocoa can experience tremendous price swings.

This commodity is grown within 20 miles of the Equator with the Ivory Coast of Africa the number one producer which can experience extreme geopolitical turmoil sending prices sharply higher so stay long. 

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 

 

Hand touching graph moving up with plan growing

When Do You Add To Your Winning Trade? This has always been a very interesting question because it can create a situation of going from rags to riches to riches to rags in a very short amount of time.

Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse.

Commodity prices can move very quickly with large gains or loses like we experienced in 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position.

My answer to this question is add only once to the trade if that position has made you at least 1%-2% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.

 

 

 

Platinum Futures—Platinum futures in the July contract is trading higher for the 2nd consecutive session up another $19 at 1,242 looking to break out of a 3 month consolidation pattern. If you take a look at the daily chart the uptrend remains intact as my consolidation rule states the longer the channel the stronger the breakout and I think that situation is going to occur on the upside.

I have been recommending a bullish position over the last couple of weeks from around the 1,254 level and if you took that trade continue to place the stop loss at 1,115 as the proper exit strategy as I want to give this trade some room due to the increasing volatility. Platinum prices are trading above their 20 and 100 day moving average as the trend remains to the upside as I still think the 1,300 area will be breached in the coming weeks ahead as historically speaking especially compared to the rest of the precious metals sector prices look cheap.

At the current time I also have a bullish silver recommendation which is sharply higher in today’s trade as the whole complex looks to move higher so stay long as I will be looking at adding more contracts once the stop loss and the risk/reward would be more in your favor while also adding to a winning trade. 

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 

 

Rice Futures—Rice futures in the July contract finished lower for the 5th consecutive session down another $0.15 or 1.1% at 13.45 as prices are near a 3 week low. I have been recommending a bullish position from around the 13.60 level and if you took the trade continue to place the stop loss at the 13.38 level as the exit strategy as the volatility certainly has come to life over the last week or so.

At the current time my only other grain recommendation is a bullish wheat trade as the entire sector has weakened over the last week or so due to massive profit taking, but the longer term secular trend still remains intact.

At the present time rice is now trading below its 20-day but still above its 100-day moving average as the trend is mixed as prices have dropped over $1.00 over the last week, however I still don’t believe the 14.60 level will be the high in 2021, but you must have an exit strategy when you trade so stick to the rules. 

 

TREND: MIXED

CHART STRUCTURE: SOLID

VOLATILITY: HIGH

 

 If you are looking to contact Michael Seery (CTA—COMMODITY TRADING ADVISOR) at 1-630-408-3325 I will be more than happy to help you with your trading or visit www.seeryfutures.com 

 

TWITTER—@seeryfutures 

 

 Email: mseery@seeryfutures.com

 

 

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